Recession Odds Rising

38 Days to SIC
Loan Margins
Weighted Activity
“Highly Attentive to Inflation Risks”
What’s an FOMC to Do?
The Art of Artificial Intelligence and Pronouns

Recently I saw someone share a clip from their weather app. It said, “Rain expected at 3 pm,” right above a little graphic showing a 30% chance of rain at 3 pm. What’s wrong with that picture?

Well, if the calculated odds of rain were only 30%, then “expected” wasn’t the right word. The odds were actually against rain by 70%. Expecting it would likely prove wrong.

Predicting recession is a lot harder than predicting weather. Clouds don’t care what you think; they go wherever the wind pushes them. The economy, on the other hand, responds to human action. Our actions and attitudes can actually change it.

Many of us economy-watchers have been expecting recession, though with significant differences on the odds and timing. Whatever the numbers, recent banking developments—the kind of human actions the weather blithely ignores—just made recession more likely and may have accelerated its onset. Today we’ll talk about why. But first…

38 Days to SIC

This year’s Strategic Investment Conference is shaping up to be the best ever. We’ve secured Stephen Roach who has a storied history on Wall Street and is now a senior fellow at Yale University, teaching courses on “The Next China” and “The Lessons of Japan.” Before moving into academia, Roach spent 30 years at Morgan Stanley, including working as the firm’s chief economist. From 2007 to 2010, he was the chairman of Morgan Stanley Asia.